After a sharp spike in spending on public servants under Prime Minister Stephen Harper’s watch, a new report finds the Conservative government’s recent restraint plans will ultimately bring Ottawa’s staffing costs back down to a historical average.
Parliamentary Budget Officer Kevin Page released an extensive report on federal staffing trends Tuesday that examines the billions Ottawa spends on employees.
The report looks at personnel costs from 1990-91 to 2011-12 and concludes that life in the public service is not as stable as outsiders might expect.
While staffing levels and personnel spending have been remarkably stable on average, there have been sharp upward and downward swings over the past two decades. The record suggests Canada’s decision makers are true disciples of John Maynard Keynes, creating booms and busts in the public service that counter developments in the Canadian economy.
For instance, federal staffing levels peaked during the recession of the early 1990s. Then as the economy recovered and Ottawa looked to erase the deficit, 70,000 federal jobs were eliminated in the mid-1990s. Since then, employment shot back up by 90,000 to record highs, but is once again on a downward trend.
In spite of all this fluctuation, the PBO analysis found that the compound annual growth rate in federal employment shows almost no change at all on average at just 0.2 per cent over the period from 1990-1991 to 2011-12.
“In effect, the statistics that emerge from the data suggest that the federal public service may not be as ‘stable’ an employer as has been routinely perceived, evidenced by the significant variation in [full time] growth over the study period,” states the PBO report.
At $43.8-billion in 2011-12, federal spending on personnel is a major expense, making up 38.1 per cent of Ottawa’s direct program spending.
The PBO report says Ottawa could be doing much more in terms of providing more transparency to Parliament around its decisions on staffing. For instance, it is not currently known how current staffing cuts will be spread out across specific government programs.
The number of “full-time equivalent” positions in the federal public service is projected to drop from 380,000 in 2010-11 to 349,000 in 2014-15 at the end of the government’s current cost-cutting plans. Even that level will still be slightly higher than the historical average of 336,400 full time public servants over the period from 1990-91 to 2011-12.
However the current cost-cutting plans – if fully implemented – will bring personnel expenses as a percentage of GDP to slightly below the historical average of 2.2 per cent.
“The effect over the study period is that the federal workforce has remained virtually unchanged while personnel expenses have grown by 4.1 per cent on a compounded basis per year,” states the report.
“From the data, the analysis for the years between 2012-13 and 2014-15 resembles that of the mid-1990s where both [full-time] figures and personnel expenses were under restraint. In effect, the significant reductions to employment due to a fiscal restraint program is about to occur once more in light of Budget 2012 announcements.”
Looking at the numbers another way, the PBO points out that the ratio of federal employees to the Canadian population is projected to fall below the historical average of 1.08 per cent to 0.96 per cent by 2014-15.
The PBO report also attempts to compare federal staffing trends to trends in the private sector, provincial governments and the U.S. federal government.
Compensation for full time federal public servants has a compound annual growth rate of 3.9 per cent from 1990-91 to 2011-12, which is higher than the 3.1 per cent in the Canadian business sector. However the growth in employment was higher in the private sector.
Compensation for provincial public servants grew by 2.7 per cent over the same period, but employment growth provincially outpaces federal hiring.
Looking south of the border, the PBO report found that the average U.S. federal public servant receives $110,400 (Canadian) in total compensation, compared to $111,300 for full time federal public servants in Canada.